Rejuvenated Tele2 passes the one million subscriber mark

Swedish telecoms group Tele2 has confirmed that its Kazakhstan wireless unit passed the one million subscriber mark at the end of August, up from 663,000 at the end of 2Q11. The news signifies a remarkable turnaround for the once struggling mobile unit, which saw its subscriber base slump to just 217,000 in June 2010, hampered as it was by former owner Kazakhtelecom’s lackadaisical attitude towards the cellco; the fixed line incumbent already held stakes in two rival mobile operators, Altel and K’cell, and quickly distanced itself from the new market entrant when it failed to live up to expectations. As a result of the marked increase in subscribers, Tele2 now expects its Kazakh subscriber base to climb to around 2.3 million – 2.5 million by end-2012; Tele2 Kazakhstan is targeting a long-term share of 30% of the wireless market, up from its current 3.5%. Mats Granryd, president and CEO of Tele2, commented: ‘I am very pleased with the way our Kazakh operations are currently developing. We have had a good start with the introduction of our price-leading and easy-to-use mobile services in the country and we will not stop until we are the indisputable ‘Best Deal’ provider’.

According to TeleGeography’s GlobalComms Database, Sweden’s Tele2 agreed to acquire Kazakhtelecom’s 51% stake in the cellco formerly known as Mobile Telecom Service (NEO) in December 2009, for SEK545 million (USD76 million) in cash. However, at the time of the transaction, NEO’s operations were in undeniably poor shape, and immediately after the deal, NEO saw its subscriber base plummet amid takeover-related uncertainty. On 24 April 2011 NEO relaunched under the Tele2 brand name, as part of a concerted push to raise its profile and expand its meagre 2% market share. By August 2011 services were available in eight of the country’s 14 provinces, with the company pledging to extend services to every single region by end-2011; Tele2’s Swedish backers planned to invest up to SEK1.3 billion in Kazakhstan during 2011 to redress the situation.